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£14bn Mastercard group action claim to proceed following historic Supreme Court ruling

The Supreme Court has today (11 December) dismissed Mastercard’s efforts to thwart former financial ombudsman Walter Merricks’ £14bn group action claim against it in what is a landmark decision for the future of collective actions against companies in the UK courts.

The decision from the Supreme Court upholds a previous ruling from the Court of Appeal and sets aside the original judgment of the Competition Appeal Tribunal (CAT) which would have stymied the group action claim. 

The action brought by Merricks hopes to reclaim funds for people aged over 16 who had used Mastercard and were overcharged on transaction fees between 1992 and 2008. The case is the first mass consumer claim brought under the new collective action regime introduced by Parliament in the Consumer Rights Act 2015. The legislation was designed to enable collective actions to be brought by a class that has suffered loss as a result of competition law breaches.

The Supreme Court held that the original judgment of the CAT ‘contained errors of law’ and it ‘misdirected itself in how it applied the new legislative regime.’ Crucially, the Supreme Court has determined that the CAT never found that Merricks would be unable at trial to have a reasonable prospect of showing that the class had suffered significant loss.

Commenting on the decision, Boris Bronfentrinker, the Quinn Emanuel Urquhart & Sullivan partner representing Merricks, said: ‘Today sees the biggest case in UK legal history itself make history in what is a landmark day for all UK consumers. Mastercard and its lawyers have long made dismissive remarks and commented that the case was overblown and unsuitable to proceed as a collective action, yet the Supreme Court has today definitely determined the exact opposite. The Supreme Court has recognised the need for mass consumer collective actions to be pursued. Mastercard has acted in an anti-competitive manner that has been definitely determined by the European Court of Justice. The Supreme Court has now affirmed the decision of the Court of Appeal that this is a claim that needs to have its day in court to decide the full extent of harm Mastercard has caused to UK consumers.’

Freshfields Bruckhaus Deringer’s joint head of its global antitrust litigation group, Mark Sansom, commented: ‘The Supreme Court dismissed the appeal rather than carry out a re-hearing in these very unusual circumstances. However, it is important to note that there was a 2-2 split between the judges on a number of the key issues, with two of the judges accepting that the Competition Appeal Tribunal had been entitled to reject the proposed claim rather than certify it to proceed. The Tribunal will now engage with the implications of that at a future hearing.’

Alongside Bronfentrinker, Merricks is represented by fellow Quinn Emanuel partner Nicola Chesaites, instructing Monckton Chambers’ Paul Harris QC, and Brick Court’s Marie Demetriou QC and Victoria Wakefield QC.

Meanwhile, Mastercard is represented by Freshfields partners Jonathan Isted, Nicholas Frey and Mark Sansom, instructing Brick Court Chambers’ Mark Hoskins QC, Jon Lawrence and Hugo Leith, and One Essex Court’s Matthew Cook.

For more background on this dispute, see ‘Perfect storms – Cases of the year’ part of our Disputes Yearbook 2020